Primed for future growth

Positive signs in the housing market as well as unemployment rates are giving the tile industry reason to believe that 2013 will bring more growth for the category.

“It seems pretty promising,” said Stefano Rabaioli, vice president sales and marketing, Florim. “We are hearing that there will be about a 9 percent increase in consumption from new home construction and 5 percent on remodeling.”
Executives are encouraged by homebuilders’ expectations that they will build more homes. “If the trend continues, we could see an annualized number in the 850,000 to 900,000 homes built in 2013,” noted Hector Narvaez, vice president of sales and marketing, Marazzi.

Mark Shannon, executive vice president, Crossville, agreed: “We’re poised for growth next year based on market indicators and knowledge of what’s happening in our distributors’ regions.”
“We anticipate the market to modestly grow 3 to 5 percent, similar to 2012,” said Brandon Dahlbo, president of Vitromex USA. “However, if consumer confidence increases and unemployment continues to decline, both new residential and commercial activity could grow, supporting a larger increase.”
On the flip side, the political uncertainty of the “fiscal cliff” and the continued tight constraints on mortgage lending are factors that could impede growth in the market and should be considered when viewing potential growth in the United States.
“I am not too crazy still about the builder market; it will be more or less what we’ve seen, and transportation costs are constantly rising,” said Sean Cilona, marketing director, Florida Tile.

Dahlbo added, “Price pressure will continue on commodity and mid-range products, as new residential and multifamily construction are the primary drivers of these categories. Given that capacity in other nations is greater than demand, imports into the United States are likely to increase in these categories.”
Digital printing will continue to make an impact on the market. According to Lori Kirk-Rolley, senior marketing director, Daltile, “Manufacturers of digital printing machines will continue to find ways to combine other printing technologies with their machines in order to create even more sophisticated products that closely emulate not only natural stone looks, but also textiles, woods and other visuals that benefit from depth of color and sophisticated graphics.”

Cilona said Florida Tile is “hitting it hard” in terms of capacity and new product development. “We will continue to push our commercial program. We are adding sales reps that are dedicated to architects and designers and are continuing to develop more technical porcelain products specifically for the commercial market. But, we are not going to abandon the residential market. There is still a huge remodeling market and we will have seven or eight introductions for the next year.”

In terms of trends, the industry will continue to see larger tile sizes being used, as manufacturing capabilities become even more sophisticated. At the same time, there may also be resurgence in smaller tiles, a favorable design staple as homes get smaller.

“We’re also looking forward to leading trends in tile design next year, as we’ve been closely studying the priorities of product specifiers to understand the looks they want to see,” Shannon said. “Our new product introductions next year will offer a few surprise turns style-wise, and that’s going to be very fun to bring to market.”
“We anticipate the various shapes of tile will continue to evolve,” Kirk-Rolly added. “First we had squares, followed by planks, which raises the question of what’s next?”